If you have been thinking about installing EV charging points at your workplace, you are in good company. As more of your team make the switch to electric, the question of whether to put chargers in at the office, the depot or the warehouse car park is coming up more and more often. It feels like a sensible thing to offer. But before you start asking for quotes, there is one question worth getting straight first. What does HMRC make of it?
The good news is that, for the moment at least, HMRC is unusually generous in this area. Get the setup right and providing free workplace charging is entirely free of tax and National Insurance for both you and your employees. But there are conditions attached. Get them wrong and what looks like a thoughtful perk can quietly turn into a reportable benefit.
Here is what you need to know.
The basic rule
When an employer provides electricity for employees to charge their vehicles at or near the workplace, that electricity is not treated as a taxable benefit in kind. It does not matter whether the car being charged is the employee’s own private vehicle or a company car. The exemption can still apply.
This is different from how most benefits are treated. If you gave employees free fuel for a petrol car, you would create a significant tax charge. But electricity is not classified as ‘fuel’ under the car fuel benefit rules, which means the usual benefit in kind machinery does not kick in.
The result is that you install the chargers, pay the electricity bill, and employees plug in. Nobody has anything to report on a P11D, and nobody pays income tax or NI on the value of the electricity.
Three conditions you must meet
The exemption only applies if all three of the following are in place. Miss one and you are back in taxable benefit territory.
- Charging must happen at or near the workplace. This is about you providing facilities on site, not reimbursing employees for charging they have done elsewhere.
- The facility must be available to all employees generally, or to a defined group at that site.
- You must be providing the charging facility itself, not simply paying employees back for costs incurred somewhere else.
The ‘available to all employees’ point is worth pausing on. You cannot install a single charger reserved for one senior member of staff and claim the exemption. The facility needs to be accessible to your workforce in general, even if not every employee currently drives an EV. Think of it a bit like the staff car park. Available to those who need it, even if not everyone uses it.
What about reimbursing employees who charge at home?
This is where things get more complicated, and it is one of the most common areas of confusion we see.
If an employee charges a company car at home and you want to reimburse them for the electricity, HMRC publishes a specific rate for the purpose. The Advisory Electricity Rate, or AER, is a pence-per-mile figure that does not create a taxable benefit when you stick to it.
From April 2026, the rates are:
- Home charging for a company car: 7p per mile
- Public charging for a company car: 15p per mile
If you reimburse more than the AER, the excess is taxable and needs to be reported on a P11D. If you reimburse less, employees cannot claim the difference back from HMRC, which is the opposite of how petrol and diesel mileage rates work.
One further nuance is worth flagging. The AER only applies to company cars. If an employee is using their own private electric vehicle for business travel and you want to reimburse them, that falls under the Approved Mileage Allowance Payment, or AMAP, system instead. Currently, 55p per mile for the first 10,000 business miles and 25p per mile after that. The AMAP rate is designed to cover all running costs, including electricity, so you cannot add a separate electric rate on top.
Two scenarios, side by side
The cleanest way to see how this plays out in practice is to compare two situations.
Tax-free. You install chargers in your car park. They are available to all staff. Employees plug in during the working day, and you pay the electricity bill directly. No P11D entry, no income tax, no NI.
Taxable. You give employees a monthly allowance to cover their home charging costs, without tying it to actual business mileage using the AER. That is a cash allowance and will be treated as additional pay.
The capital allowances bonus
There is a further financial benefit to actually installing the equipment. For the 2025/26 tax year, and extended to 2026/27, you can claim 100% first-year allowances on electric vehicle charging point equipment. That means the full cost of purchasing and installing the chargers reduces your taxable profits in the year you spend the money, rather than being spread out over several years.
This is a deliberate government incentive to encourage businesses to invest in EV infrastructure, and it makes the upfront cost considerably easier to justify when you are putting the numbers in front of your finance team.
Are there any grants?
Yes. The Workplace Charging Scheme is open until 31 March 2027 and provides support covering up to 75% of the purchase and installation cost of EV chargepoints, up to a cap per socket. It has been widely used by businesses, charities and public sector organisations. Grant conditions do change, so it is always worth checking the current position on GOV.UK before committing to an installation.
There is also a separate EV infrastructure grant that can cover part of the supporting infrastructure costs. The two grants can be combined on the same site, but not for exactly the same chargepoints. A bit of planning at the outset helps if you want to make the most of both.
What employers need to do in practice
If you get the setup right from the start, the honest answer is not very much. If the charging facility meets the three conditions we covered earlier, there is nothing to report on a P11D and no payroll implications. You simply pay your electricity bill as a business expense and carry on.
Where you do need to take care is in the surrounding detail.
- If you reimburse home charging for company car drivers, use the AER (7p or 15p per mile from April 2026) and make sure employees are keeping proper mileage records.
- Any reimbursement above the AER needs to be declared on a P11D at the end of the tax year.
- If you are paying a flat monthly allowance for charging regardless of mileage, take advice. It is very likely to be taxable.
- Keep documentation showing that the chargers are available to your staff generally, not just to selected individuals.
Providing EV charging at your workplace is one of those relatively rare situations where doing something genuinely useful for your team also happens to be tax efficient for everyone involved. The electricity itself is free of benefit in kind tax. The installation can attract 100% first-year capital allowances. And you may be able to claw back part of the setup cost through a government grant.
The area where employers tend to come unstuck is home charging reimbursements, particularly flat allowances that are not tied to actual business mileage. If you are not sure how your current arrangements stand, it is worth a conversation with your payroll team or adviser before the end of the tax year.
This is also an area where the rules are likely to evolve as EV adoption continues to grow. We will keep you updated as anything changes.
